Along with predicting the end of the world in 2012, the ancient Mayan calendar could have helped investors if it threw in a few forecasts about the markets so we'd know how to time our stock sales to best fund a final fling.

Alas, I checked, and it doesn't. So let me offer a few fearless forecasts of my own.

No, the world won't blow up; sorry, Mayans. More surprisingly -- given the predominant gloom-and-doom mood -- neither will the stock market. In fact, stocks will put in a remarkable rally as the economy surprises nearly everyone to the upside. Europe will get downgraded to a back-burner issue, which will also help stocks.

There will be some bad news -- and perhaps a bloody civil war in Iraq -- which, combined with other flare-ups in the Middle East, will cause oil prices to spike at times. And we will see more ugly and unproductive budget debates in the U.S., which will contribute to a spike in gold price. So now's a good time to buy the yellow metal -- or cheap gold mining stocks.

And there's more good news ahead. Everyone's favorite social-networking site, Facebook, will come public in one of the biggest initial public offerings ever. You might finally be able to benefit financially from all the time you put in by purchasing Facebook shares. That is, if the Facebook IPO doesn't mark a peak for stocks overall -- as popular Internet IPOs did on 2011.

image: Michael Brush

Michael Brush

Here are some of the major market events I'm expecting in 2012, and ways to invest in them to get ahead of the game. Let's hope I'm right (and that the Mayans are wrong).

1. The stock market will see a 15% to 20% rally

With almost everyone -- and maybe even you -- so gloomy about sagging stock portfolios, sluggish growth, Europe and bickering politicians, how can I be bullish?

Not to be a wise guy, but I'm bullish precisely because others are so negative. History shows that stocks do the best from the points in time when everyone hates them. Investor sentiment isn't as bleak now as in early October, so the stock market isn't exactly a contrarian's dream. But investors are glum enough. They've dumped stocks in a big way in the past six months, so much so that stocks are trading for a meager 12.7 times earnings. That's about the same discount we saw in March 2009, the darkest days after the meltdown, and a broad rally followed.

And yet things aren't so bad. Earnings grew by 14% in 2011, points out Binky Chadha, the chief strategist at Deutsche Bank. In 2012, as the economy keeps grinding out gains and investors come to their senses, the Standard & Poor's 500 Index ($INX) could move to 1,500 for 20% gains, he says.

At least one veteran investor who has watched markets bottom out more than a few times over the past five decades agrees. "I really think we'll have a decent year," says Don Hodges, of the Hodges Funds. "I think the pessimism will run its course. The market feels like it's sold out."

Here's another factor that will help: Stocks typically do well in the fourth year of a presidential election cycle, especially when the incumbent has low ratings, as President Barack Obama does now.

But it won't be smooth sailing. "Markets are typically very volatile during a presidential election year, often moving up and down with pre-election polls and primary election results," says Fred Dickson, the chief investment strategist at Davidson, a brokerage. Negative headlines out of Europe or the Middle East will surely cause some sharp swings. And based on historical patterns, we could see the following twist. Stocks will be especially strong through May or June and then weaken from there, says Michael Painchaud of Market Profile Theorems.

The simplest way to play the rebound in stocks is to buy broad market exchange-traded funds like the SPDR S&P 500 (SPY, news). And since an improving economy will be a main reason stocks strengthen, cyclical stocks should outperform the most. These are economically sensitive companies -- in sectors like advertising, transportation and travel -- whose business picks up as an economy strengthens.

Stock analysts at JPMorgan Chase, where portfolio strategist Thomas Lee shares my contrarian view, cite the following 2012 "best ideas" among cyclical names: Union Pacific (UNP, news), which should get a boost from re-pricing old contracts; the hotel chain Wyndham Worldwide (WYN, news), which looks too cheap compared with peers; and Google (GOOG, news), which is an advertising play gaining share in the mobile arena. Hodges cites Coinstar (CSTR, news), the company behind Redbox DVD rentals, and (ACOM, news), a beaten-down Internet name, as stocks that could do particularly well this year.